In App Purchasing Data for iOS & Android Games & Apps

iOS & Android’s share of the U.S. portable game market revenue exploded from 1% in 2008 to 34% in 2010.

Nintendo’s U.S. share contracted to 57% from 75% from 2008 to 2010.

Games drive 75% of revenue generated among the top 100 grossing iOS apps, of which 65% were generated from freemium games.

In App Purchasing (2012):

71% of all In App Purchase transactions are under $10

These generate 31% of Revenue

16% of all In App Purchase transactions are from $10 to $20

These generate 18% of Revenue

13% of all In App Purchase transactions are great than $20

These generate 51% of Revenue

30% of the revenue is generated from transaction over $50

The Whales are driving Revenue

The average amount spent per transaction is $14

Within the “under $10” bucket, most transactions cluster at the $9.99 level, followed by $4.99, and finally $0.99.

Surprisingly, consumers spent $0.99 less than 2% of the time

Why then would so few consumers spend just $1 in freemium games? Because freemium games drive a different decision-making mindset for consumers. If they love the game, they don’t mind spending a lot.

Around 3% of consumers will spend money in freemium games. A deep commitment to the game experience appears to influence their buying habits.

The second reason the $14 average seems high is because the high-end of the spending spectrum is very high. Among all purchase price points, over 5% of all purchases are for amounts greater than $50, which rivals the amount paid at retail for top console and PC games.

Cost of User Acquisition (2012):

On iOS, the cost of user acquisition is going up.

On Android, the cost of user acquisition has been dropping.

Tapjoy took its incentivized installs to Android as well. And while Android’s user count has been on a tear, monetization has been weaker than on iOS.

You don’t have control over the marketing costs, but you do have control over the Lifetime Value of your users.

If your lifetime value is high, you don’t care as much about your cost-per-install (CPI) or the cost of each new user.

If CPI is getting too expensive, the focus needs to move to engagement, retention, and monetization of your product to drive LTV up above CPI costs.